1. Your adjusted cost basis is the $195k from inheriting half + $275k you paid the widow + improvements See Publication 551 -Basis of Assets - IRS for more help. You had a lot of repairs. Here is an excerpt:
Increases to Basis
Capital improvements:
Putting an addition on your home
Replacing an entire roof
Paving your driveway
Installing central air conditioning
Rewiring your home
Assessments for local improvements:
Water connections
Sidewalks
Roads
Casualty losses:
Restoring damaged property
Legal fees:
Cost of defending and perfecting a title
Zoning costs
2. You will report it under investments as Other, sale of a second home but follow these steps:
- Select Other
- Name, continue
- Second home
- Select that you purchased it - the inherited option simply makes it long term and your already is with the purchase date
- continue filling in the boxes
3. You did make a profit on the sale. Be sure to view your forms and make sure your selling expenses are in there.
Reference: Where do I enter the sale of a second home, an inherited home, or land on my 2024 taxes?
To print or view your forms:
- In desktop, switch to Forms Mode.
- For online:
- On the left side, select Tax Tools
- Select Print center
- Select Print, save or preview this year's return
- If you have not paid, select pay now.
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